White House puts together climate finance strategy

The White House on Friday laid out a path for how it will protect the economy from climate risks. 

In its “Roadmap to Build a Climate-Resilient Economy,” the Biden administration characterized climate-related risks as falling into two categories: physical risks from extreme weather and what it called “transition risk” as the nation shifts away from a carbon-fueled economy.

The report outlines a range of pending and future actions meant to shield both the broader financial system and American households from climate-related risks. The administration highlighted the housing market, insurance and retirement funds as areas where Americans could personally feel the costs of climate change.

The White House plan calls on federal financial regulators and internal budget offices to develop frameworks for assessing dangers posed by climate change and the societal response to it. Federal agencies will also be required to consider how climate change could impact their direct operations and the services they provide to Americans.

Much of the report walked through actions either already underway at federal agencies or previously announced by their leaders, including the Securities and Exchange Commission’s pending climate disclosure requirements and the Financial Stability Oversight Council’s soon-to-be-released report on climate risks to the financial system.

The departments of Housing and Urban Development, Agriculture and Veterans Affairs will also review their home loan programs for climate-related dangers and vulnerabilities facing millions of Americans with federally backed mortgages.

The White House plan also highlighted a pending Labor Department rule clarifying that investment managers can consider environmental, social and governance issues on behalf of clients. The agency will also review climate risks facing the Thrift Savings Plan, which covers 6.5 million people.

It also mentions a previously announced step to update building codes related to the National Flood Insurance Program and another to give companies with low greenhouse gas emissions preference in federal procurement.

On a call with reporters, National Economic Council Deputy Director Bharat Ramamurti previewed two forthcoming reports. 

One, from the Financial Stability Oversight Council, will detail how financial regulators are addressing climate change, while the other, from the Securities and Exchange Commission, will have recommendations for mandatory disclosures on risks that climate change may pose to investors. 

National climate adviser Gina McCarthy called the report a “critical first step” to address the “systemic” threat of climate change.